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Using A Legacy LOS In The Cloud Is Costly

You get what you pay for, the saying goes. But in our industry this rule doesn’t always apply—especially when it comes to loan production. Today’s lenders have made major investments in producing high quality loans and improving the borrower experience. Yet, too often, they don’t receive the results they expected.  

This is particularly frustrating given the current lending environment. For lenders, producing high quality, compliant loans designed to meet federal and state mandates and investor requirements has meant adding staff to review loan files for accuracy and completeness. In fact, loan production costs are at all-time highs because of the new rules of the road. Higher rates and a cooling housing market have only exacerbated this situation. 


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Meeting the demands of today’s mortgage borrower and providing great customer service have also come at a premium. This is true in spite of rapid adoption of new fintech solutions designed to make the mortgage process simpler for consumers. While these tools make the mortgage process easier in many ways, they are often poorly integrated with a lender’s back end technologies, pushing manufacturing costs even higher.

Every lender wants to provide a better customer experience and lower their costs, but limited options appear to make attaining both goals impossible. Yet, they actually are achievable. A quiet revolution is taking place in mortgage production that is reversing this all-to-familiar predicament—and it’s all happening in the cloud. 


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A Revolution Driven by Millennials

Clearly, Millennials are behind the mortgage industry’s most important advancements in customer service. They’re the ones who literally grew up with computers all around them, even in their back pockets, and they’re the ones driving demand for more convenience and simplicity. They’re also the ones increasingly driving the housing market. 

According to Realtor.com,  Millennials accounted for 45 percent of all new mortgages by the end of 2018, compared to 36 percent for Generation X buyers and 17 percent for Baby Boomers. In order to better serve this growing market, lenders are swarming to do-it-yourself websites and mobile apps designed to give borrowers a simpler, more convenient way to get a mortgage. And they are making it easier in many ways.  


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Another driving factor behind this “new normal” in mortgage customer service is that the lender, not the real estate agent, is now the first point of contact for most homebuyers. Most consumers are well aware that it’s not easy to qualify for a mortgage. They know there is no point in calling a real estate agent or even looking at homes until they are sure they can afford to buy, so they are more likely to look first at financing. This puts lenders behind the wheel in the homebuying transaction. The problem is how to take the borrower to where they want to go. 

Because they are so comfortable with technology, Millennials are more likely to research and shop for mortgages online long before they are willing or even interested in speaking with a lender. In response, lenders have adopted consumer-direct tools such as self-driven borrower websites, automated asset and income verifications, and credit services that let borrowers find out their FICO scores and determine what they can afford to buy. 


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These technologies are available on a wider number of platforms than ever before. Borrowers today can literally research, qualify, apply for a mortgage and sign disclosure documents while sipping a latte at their local Starbucks. Therefore the potential for excellent customer service is evident. So is the potential for saving costs, since borrowers are able to do more of the legwork of getting qualifying and approved for loans. So what’s the problem? 

The problem is that this whiz-bang mortgage experience doesn’t last because it only exists on the front end of the transaction. Behind the scenes, lenders are still struggling with legacy technologies that hamper production efficiency. This is because borrowers and lenders are still using different technologies to create the same loan, when both sides should really be using the same system. That’s where the magic of a platform built in the cloud enters the picture. 

More Cloud, Lower Costs

To be sure, cloud technology is not a new concept for our industry. Instead of hosting their own servers and data centers, the vast majority are leveraging cloud environments for their data storage needs. Unfortunately, however, the cloud isn’t being properly leveraged to create a faster, more efficient mortgage production process. That’s because most lenders continue to place their trust in legacy loan origination systems that were never designed for a cloud environment. They can’t integrate easily with many newer technologies, and weren’t built for consumers for use. 

On the other hand, new mortgage platforms that have recently come into the market are built with modern technology and designed from the start for a cloud environment. They’re capable of leveraging an unlimited number of software integrations, and they’re also able to handle multiple lines of business, including wholesale and  correspondent lines, traditional retail and  consumer-direct business. Most importantly, they can be used by borrowers to apply for loans using a common web browsers or even mobile apps.   

While it is true that several traditional LOS solutions are now being migrated to cloud environments, they are still tethered to their legacy technologies—in other words, they cannot simply scratch everything and start over. Even as they shift to the cloud, they still have to support their legacy systems. That comes at a cost that is inevitably passed onto clients. 

According to a recent MBA study, approximately 80 percent of a lender’s costs to originate a loan is tied to human staff, while roughly 10 percent is spent on technology. With a cloud-based mortgage platform that is capable of automating more pieces of the loan process, however, lenders can start making serious dents in these costs. The beauty of a cloud-based mortgage platform lies in its ability to improve process automation at practically every stage of the loan production process. 

These new platforms do not require lengthy, complicated and ultimately costly integrations that require site visits and repeated testing and retesting. Because they are built in the cloud with modern technology and flexible application programming interfaces (APIs), they are able to make interoperability between third-party technologies completely seamless. These third-party technologies can include credit reporting services, pricing engines and document services and many more. As a result, lenders are able to automate various steps in the loan production process and deliver a totally end-to-end mortgage experience at a lower cost. 

For example, cloud-built platforms are able to integrate software that provides real-time fees from thousands of different service providers, which can be used to populate loan disclosures. This allows lenders to manage an endless supply of accurate closing cost data, so that lenders no longer have to verify fees for accuracy by hand.If there is a change to any loan data, the fees can be instantly recalculated and repopulated throughout the loan file, reducing costs even further. Performed manually, these tasks could easily take an hour or more. When automated, they just take a second. 

No Better Time Than Now

Of course, lenders could build a cloud-based mortgage platform themselves. But very few lenders have the staff resources, the technology expertise or the necessary capital on hand to make this happen. On the other hand, there are new mortgage platforms that have already been built that can be customized to fit a business’ needs at a fraction of what it costs to build such a system in-house.

Today’s new breed of mortgage platforms also cost about the same or less than any legacy mortgage production platforms on the market today. And they pay the cost several times over by reducing manual tasks, such as collecting borrower documents or using staff resources on “stare and compare” methods of reviewing loan documents for accuracy.  

The only obstacle for lenders, it seems, is leaving behind technology that manages to get the job done—even if a better way is possible. And I get it. It’s a pretty big deal to put aside technology that the vast majority of our industry still relies on. After all, many American households – roughly 46 percent – still have landline telephones, according to a National Center for Health Statistics survey. But those numbers are dropping fast, because better technology exists. Better technology exists in our industry, too. And with so much at stake – especially with soaring loan production costs and Millennials poised to drive the future real estate market – there is no better time to use it.  

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New Player Enters The Lending Technology Space

dinCloud, a cloud services provider of hosted workspaces and cloud infrastructure, has added cloud services specially designed for the mortgagebrokers/bankers and direct lenders (i.e. banks and credit unions). The Lending solutions suite consists of dinCloud’s award-winning hosted workspaces, an application publishing platform, and private virtual servers, which are enveloped with security and data protection services (e.g. cloud backup).

Benefits for Lending Institutions

Like some other regulated industries faced with strict compliance requirements, lending organizations must adhere to an enhanced set of standards for its IT infrastructure. The Lending solutions suite from dinCloud offers a number of benefits, while meeting the security requirements dictated by governing bodies, including:

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Security – dinCloud’s infrastructure is purpose-built to combat infiltration. From IP filtering, to the dedicated firewall associated with each cloud resource, security is built into the foundation of its virtual private data centers, which also adhere to SSAE 16 auditing standards (among the most stringent in the industry).

Scalability – Lending firms are subject to fluctuating market demand and swings in staffing. Given the volatility, committing to a sizeable capital expenditure is hard to justify. The Lending solutions suite offers a scalable, pay-per-use model, amenable to businesses and that can be adjusted real-time.

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Business Continuity – Downtime means lost revenue. In a consumer-facing industry like lending, a sound business continuity/disaster recovery (BC/DR) contingency can avoid offline time that could have been spent securing new business. BC/DR functionality is built-in with redundancy and failover mechanisms. On top of that, dinCloud offers replication and backup services for added protection of company data.

Cost effective – dinCloud’s solutions help lenders gain freedom from costly and complex on-premises projects by utilizing a monthly subscription service. Instead of tying money up in IT infrastructure, that money can be used for core operations.

“The cloud is a natural step for lending institutions looking for more business agility,” said Ali Din, general manager and CMO, dinCloud. “We’ve seen the service translate into faster onboarding of employees and branches, enhanced data security, and additional savings.”

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Lending Industry Use Case

When Bank of England, a leading mortgage lender with 70+ branches across the U.S., recently sought a technology refresh, dinCloud’s solution not only met its technology requirements, but addressed some long-standing operational challenges that burdened the lender.

Previously tasked with maintaining, administering, and tracking devices across its network of divisional branches, Bank of England now has a cloud supported BYOD policy in place, allowing IT managers to get new branches and individual users up and running in minutes. The dinCloud implementation also significantly reduced the mortgage lender’s operational costs, achieving the agility that’s been cited as a key to remaining competitive in today’s landscape.

Notably, dinCloud helped alleviate the painstaking burden of maintaining and tracking hardware assets between geographically dispersed branches, drastically reducing costs (since they no longer had to ship assets back and forth between branches). It also addressed security requirements stemming from the highly sensitive nature client data processed through its physical endpoints The Business Continuity/Disaster Recovery helped them avoid potential difficulties following a disruptive event.

Patrick McCarriar, director of information technology at Bank of England applauded dinCloud’s platform for helping to improve operations. “We had a challenge keeping pace with the rate at which our business was expanding into new branches and traditional IT processes were holding us back. The agility of dinCloud’s platform allows us to easily get new branches up and running quickly, which is of tremendous value to our business. We also wanted to implement a solution that allowed us to keep ahead of the dynamic security requirements of the finance industry. dinCloud enabled us to streamline the implementation and maintenance of security controls by providing a seamless, coherent network for all of my IT assets. That efficiency and flexibility not only ensures the integrity of my environment, but also grants our customers peace of mind.”

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Cutting Corners On The Way To The Cloud

It has been almost twenty years since Salesforce first introduced the concept of cloud computing to the business world. Despite its revolutionary concept, or maybe because of it, adoption of Salesforce and cloud computing in general was initially slow. Today, cloud computing is so commonplace that even the mortgage industry, a notoriously slow adopter of technology, has fully embraced it. But in order to truly exploit its potential, a little self-reflection is required: how well do you really know cloud computing?

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The Industry’s Indispensable Shift to Cloud-computing

In the early days of cloud computing, software vendors broadcast their applications through the internet to allow multiple users to access it using “virtualization.” In this model, a single copy of the application resides on a central server and lightweight “thin client” software is installed on each user’s machine. Virtualization was a big hit.

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IT managers loved virtualization because there was only one copy of the software to maintain. Business owners loved it because their IT costs were drastically reduced. Software vendors especially loved virtualization because they could “spin up” their old, on-premise software into a cloud subscription service with minimal cost and effort.

But in reality, virtualization represents an incremental shift in technological innovation. Other than giving users convenient access and their IT teams more free time, the core technology behind virtualized software does not change at all. It’s not as if “going to the cloud” turns legacy software into an entirely new application. In fact, you could take an 8-bit version of VisiCalc, broadcast it through a server and call it a cloud computing system.

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The Value Added for Vendors in a Multi-tenancy Solution

To realize the true value of cloud computing, it’s important to understand the way an application’s underlying database is structured. In a virtualized environment, there is a single, separate and independent instance of the software code and the database. Any upgrades, fixes or integrations to the software must be installed separately in each instance. This is known as single-tenancy.

In contrast, a multi-tenant database model is truly transformative because the software code and data resides in a single, unified database. Every user across multiple clients is using the same application simultaneously. Therefore, distributing updates, fixes or integrations requires virtually zero effort from the vendor because all of their users are in the same environment concurrently.

One of the main advantages of multi-tenancy is the ability to scale an application extremely efficiently. It is similar to fixing a centralized furnace in a 100-unit apartment building versus fixing each furnace in 100 single family homes. Multi-tenancy also ensures that every client is using the same exact version of the application and has access to the same integrations.

Just as having the ability to scale an application extremely efficiently, vendors can become active participants in the implementation, configuration and end-user operation of the system because they have direct access to a client’s system and associated data. The old “batteries not included” paradigm of software delivery turns into a white glove approach, where vendors embed consultative services into their product offering.

Big Data: The Next Level of Cloud-Computing

However, these advantages pale in comparison to the true potential of cloud computing: Big Data. In a multi-tenant system, all the data generated by every client resides in one database. This means that data aggregation and normalization become non-issues, allowing for analysis and forecasting insight that can approach clairvoyant levels.

Imagine being able to determine the precise cost of originating any given loan scenario. Or the secondary gains you receive when you know the exact date when every loan in your pipeline is going to close. This level of predictability can only be achieved using big data, and big data can only be gathered in a cloud solution that has a multi-tenant database architecture.

Is big data making an impact in the mortgage industry? Not yet. Big data is still in an evolutionary phase. Even industries with mature cloud computing capabilities are only beginning to scratch the surface of big data. But as we’ve seen before, technological advancements happen quickly. Moving to a multi-tenant cloud computing model is the first step towards big data.

While transforming a single-tenant database into a multi-tenant one takes time and money, it is important to build evaluating its place in the vendors organizations now. Legacy software vendors have no choice but to start from scratch, a monumental task, but one that is manageable with the appropriate planning.

Vendors should consider a few different things when planning to integrate a multi-tenancy database. First, how well prepared is their organization to support the business model? And secondly, can the vendor deal with client expectations that are completely different from their legacy model? Gone are the days of delivering pre-packaged software (including virtualized software) and expecting an IT professional to install and maintain it. Vendors should note configurability, not customizing, is the way in which caters to a streamline process, while delivering results. A multi-tenant solution operates as such just like the air conditioner analogy mentioned previously.

Twenty years is a long time. Salesforce and other “true” cloud computing vendors have already experienced and adjusted to the growing pains of delivering software in a multi-tenant environment. Legacy software vendors who are just entering multi-tenancy – even large, well-funded vendors – will discover how difficult it is to bridge the gap from their single-tenant virtualization model. Virtualization might be a shortcut to cloud computing, but multi-tenancy is the only path to a big data future.

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New Partnership Makes Fees More Transparent

ClosingCorp’s DART service is now available through Qualia, a cloud-based settlement software that streamlines every step in the title and escrow process. DART provides guaranteed recording fee, transfer tax and filing instruction data for every residential property in the nation.

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DART is designed specifically to meet the growing needs of title and settlement agents. With more than 4,000 taxing jurisdictions and more than 80,000 related taxes, fees, customs, rules and regulations, DART provides immediate access to the precise recording fee, transfer tax and recording instruction data that is crucial to title and settlement operations. DART’s highly sophisticated engine calculates buyer/seller splits, commonly called “Who Pays” rules, and has a strength or confidence level based on collected data of statutory and customary practices by geographic location. The integration will allow law firms and title agents to automatically calculate document recording fees and transfer taxes directly from within Qualia.

“Qualia’s main goal is to create an incredibly user-friendly software that cuts out all of the unnecessary headaches currently involved in the title and settlement process,” said Nate Baker, chief executive officer of Qualia. “We are excited to complete this integration so that our users can complete 100% of their work without ever leaving their software.”

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“With this integration, Qualia’s client base now has access to accuracy-guaranteed data, which is compiled by our data analysts who continually research and document all nuances associated with these critical costs. Users can also access key forms and helpful documents to accelerate and improve the closing transaction which delivers on Qualia’s and ClosingCorp’s promise to bring efficiency to the closing process,” said Kamel Boulos, chief technology officer and interim co-CEO of ClosingCorp.

DART was originally introduced in December 2011. The system’s unique geocoding feature automatically selects the correct county and tax authority by street address. The product is available as a standalone website or via Web services integrations.

Tech Firm Embraces Cloud Computing

Cloud computing has taken off. For example, Accenture Mortgage Cadence has transitioned all of its clients – more than 600 mortgage lenders across the United States – to the Accenture Mortgage Cadence Cloud, helping the lenders better manage loan-processing cycle times, increase system reliability and seamlessly leverage product upgrades.

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“Today’s digitally savvy borrowers expect the same kind of quick, efficient service from their mortgage lender that they get from online retailers and other services,” said Keith Moore, Software Cloud and SaaS Support Executive for Accenture Mortgage Cadence. “All clients using our Enterprise Lending Center and our Loan Fulfillment Center have moved to our enhanced cloud technology, which provides the environment needed to get borrowers to the closing table on time while keeping up with the fast-changing regulatory landscape.”

The Loan Fulfillment Center and Enterprise Lending Center are software-as-a-service (SaaS)-based loan origination systems from Accenture Mortgage Cadence. The transition to the enhanced cloud will provide Accenture Mortgage Cadence clients faster servers, more system storage, enhanced regulatory compliance and loan origination efficiency and scalability to support a growing client base.

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“When designed properly, cloud technologies are the perfect building blocks for mission-critical solutions such as our Mortgage Cadence platform,” said Trevor Gauthier, managing director of Accenture Mortgage Cadence. “We are proud to be an early adopter of SaaS mortgage technology, and today ours is one of the most-mature cloud-based technologies in the industry. Our software solutions provide maximum uptime to ensure that our clients are able to provide their borrowers with fast and reliable service.

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Combining Education And Technology

Level1Analytics, LLC a financial modeling software company, has been selected by The Mortgage Bankers Association (MBA), a national association representing the real estate finance industry, to re-design the MBA’s School of Mortgage Banking simulation model software. This software is used to train mortgage banking executives and managers in the complex dynamics of mortgage banking including best execution decisions. The updated software will be cloud-based and will more accurately reflect the actual interplay between often conflicting drivers of success in this industry.

The MBA’s School of Mortgage Banking series includes three, four-day courses. The rigorous program created in 2005 includes two traditional classroom style courses and a capstone course that is interactive and discussion-based. This capstone course focuses on strategy and centers around a simulation that replicates the experience of running a mortgage lending operation over a period of eight quarters.  During each quarter, participants are asked to make real world decisions concerning staffing (loan officers and back-office), distribution channels, hedging, product offerings and pricing, compensation, investments in technology and marketing, reserves for losses and a myriad of other decisions that mortgage executives face daily.  Changing economic and regulatory scenarios over the simulation period adds realism to the exercise and often result in interesting and surprising financial results.

Level1Analytics will use their modeling software expertise to redesign the existing software. The focus will be on cloud enabling the software, allowing easier access to the program.

“We are working towards allowing the software to have infinite flexibility for future development and be relatable to current dynamics in the industry for our classroom students,” said Dr. Thomas Healy, CMB, President of Level1Analytics.

Market Analysis: Use The Cloud To The Fullest

*Use The Cloud To The Fullest*
**By Tony Garritano**

***There’s a lot of talk about cloud computing these days. But how do you use it? I think that’s the question that most lenders are asking. If done right, cloud computing can add value. For example, I have learned today that CoesterVMS, a nationwide provider of appraisal management services and technology, has successfully integrated its Cloud Control appraisal management technology into the Ellie Mae Encompass360 mortgage management system, giving Encompass360 users the ability to order Coester appraisals with a single mouse click. The integration also allows users to automatically schedule appraisal appointments and process check payments through an integrated e-check tool. Here’s how the cloud is making a difference:

****“Integrating Cloud Control into Encompass360 helps ensure a hassle-free appraisal process for everyone—the lender, the appraiser and most importantly, the borrower,” said Bill Reichel, production manager for Weststar Mortgage, a rapidly growing mortgage banker with over 30 branches across the country. “At Weststar, investors appreciate our 100% compliance, which includes appraisals, and borrowers appreciate our focus on making transactions as fast, smooth and straightforward as possible. We couldn’t be happier about this integration, which enhances our performance in both areas.”

****With Coester’s Cloud Control now integrated with Encompass360, the user simply clicks “order appraisal,” enters the borrower’s credit card information and the borrower’s availability, and clicks “confirm.” The Cloud Control system auto-populates the appropriate fields in the appraisal report using information from Encompass360, then automatically finds and schedules a qualified, experienced, licensed appraiser who is available to complete the appraisal.

****Since lenders typically function as middlemen, contacting both appraisers and borrowers to schedule appraisal appointments, it can take days to over a week to schedule an appraisal. This indirect method of scheduling often results in broken and rescheduled appointments, and appraisals being reassigned to other appraisers. With Cloud Control’s automated appointment setting feature, however, Encompass360 users never have to make a call or send an email – a first for the appraisal industry.

****After the appraisal appointment is set, Cloud Control provides automatic updates to the lender and the borrower, and can deliver the completed appraisal report directly to Encompass360. When the appraisal is completed, it is quality checked with Coester’s cData, an automated appraisal review technology. Should cData uncover any discrepancies, errors, omissions or other issues, Cloud Control automatically sends the appraisal back to the appraiser to be corrected, along with detailed information on the areas in question. The appraisal does not get returned to the lender until all issues are addressed.

****“Much of the appraisal process is antiquated and redundant. That can really slow down the mortgage cycle and add costs for both lenders and borrowers,” said CoesterVMS CEO Brian Coester. “There’s no reason lenders should have to add days or even a week to the mortgage cycle just to schedule an appraisal or make sure it’s compliant and up to standard—and with Cloud Control, they don’t have to.”

Market Analysis: How Can The Cloud Help You?

*How Can The Cloud Help You?*
**By Tony Garritano**

***My kids are getting to the point where they’re using slang words that I don’t understand. I try to understand what they mean, but I realize that next week they’ll say something else that I don’t grasp. I’m sure lenders feel the same way when technology vendors throw out buzzwords and acronyms. The latest buzz is all about cloud computing. But how can cloud computing help lenders? Actually in a variety of ways. For example, Coester Appraisal Group, a nationwide provider of appraisal management technology and services, has launched the Cloud Control Compliance Center, a new tool that lenders can use to ensure compliance with all major industry regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, Truth in Lending Act, and more. Here’s how it works:

****Cloud Control’s Compliance Center, which can be customized based on the specific information a lender needs, enables lenders to verify appraisal compliance and print out a compliance report with just a click or two. The Compliance Center’s findings provide all the documentation lenders need in the case of an audit. Lenders can see exactly how each appraisal report measures up to new and existing industry requirements, such as customary and reasonable appraiser fees, technology issues like SAS Type II 70 control standards, and appraisal independence requirements. Lenders can also use the Compliance Center to view appraisal contracts; to audit and remove appraisers; check the license status or possible disciplinary actions of individual appraisers; ensure their specific policies and procedures like TILA triggers and value reconsiderations are being followed; and much more. Compliance Center’s findings also include recent value reconsiderations as well as access very detailed information about every appraisal order, down to the comments, order date, the payment amount and when it was processed for TILA purposes

****Despite their complexity, Compliance Center’s reports are easy to access and easy to understand. They’re accessible via an on-screen view that can be easily downloaded in PDF format and in printed form within Cloud Control’s cData report.

****“With all the different regulations lenders are facing, proving appraisal compliance has been extraordinarily difficult, but we’ve managed to make it easy,” said Brian Coester, CEO of Coester Appraisal Group. “Our Compliance Center provides everything lenders need to stay compliant in their appraisal relationships and their orders – nothing is left to guesswork. Lenders simply select what they want to know about an appraisal, click the print command, and they’re done.”

****The Compliance Center is accessible through Cloud Control, Coester Appraisal Group’s new appraisal management technology built on the award-wining platform of Salesforce.com. Launched in March of this year, Cloud Control offers lenders unlimited customization in managing appraisal orders and services while creating sales and marketing rules that can help them become more efficient, stay compliant and generate new business.

Understanding The News: Servicing Leader Embraces New Cloud Technology

*Servicing Leader Embraces New Cloud Technology*
**DRI Launches New Cloud Solution**

***Default management software, DRI Management Systems has announced that its award-winning DRI Office is now available as Software as a Service (SaaS) through cloud computing. Users of DRI Office are able to access the platform over the Internet while the software and data are securely hosted on servers at a top-tier data center. Servicers benefit from the same or better service levels and performance than if the software programs were installed locally on end-user computers.

****“Small servicers today need the tools that larger players have,” said Fred Melgaard, executive vice president and COO at DRI Management Systems. “These include compliance tools; total staff coordination; a system that provides complete accountability; straight-through processing of all expenses all the way to the claim; system flexibility; and automation of manual processes.” Melgaard cites improvements in cloud delivery technology that enable DRI’s traditionally high standards for process flexibility and delivery to be realized using this convenient and cost-effective approach. “Every size and type of loan servicer today faces the same compliance and auditing challenges,” he says. “DRI Office keeps servicers ahead of compliance demands and arms them with a complete audit record automatically.”

****Using DRI in the Cloud, mortgage servicers are able to get their applications up and running faster, with easier manageability and practically zero maintenance. DRI Office in the Cloud frees IT professionals to focus on other mission-critical areas instead of maintaining local DRI Office host servers. There is no need for capital expenditures on hosting servers and infrastructure, equipment that only depreciates and becomes obsolete over time.

****“DRI Office in the Cloud results in rapid deployment, low start-up costs, scalability, broad network access, and measured service,” Melgaard added.

****A base fee provides the platform and a fixed amount of storage and/or computations, and thereafter pricing varies with usage. “Cloud services are proving to be a valuable approach for companies wanting to make their costs as variable as possible,” Melgaard says. “Servicers need every advantage when dealing with defaulting loans, and that includes watching the bottom line. We are constantly improving the functionality of DRI Office while leveraging cloud technology to provide flexibility and unprecedented client control over vital default management processes.”

Market Analysis: Tim Anderson Looks To Shake Things Up

*Tim Anderson Looks To Shake Things Up*
**By Tony Garritano**

***I am very proud to call Tim Anderson a friend. When I started in this industry as a little pup, he helped me. He took me under his care and showed me the lay of the land. I am very grateful for all the time and effort that he put into guiding me so that I could really understand the space. His friendship is invaluable to me. So, when he told me that he was no longer at LPS I was eager find out where he went and what he would do next. I can tell you, based on my talk with him, Tim Anderson is ready to shake up this space like only he can. Here’s the scoop:

****ISGN Corporation, a provider of end-to-end technology solutions and services to the U.S. mortgage industry, has named Tim Anderson director of corporate technology strategy. Anderson brings more than 30 years of mortgage industry and technology experience to ISGN, where he’ll develop a strategic roadmap for ISGN’s delivery of products, services and technology, helping position the company as the leading driver of solutions in the mortgage marketplace.

****When ISGN started it made a lot of high-profile acquisitions of companies like MortgageHub, Dynatek, London Bridge and others. However, recently we haven’t heard too much from ISGN. Tim Anderson explains, “The company has been laying low. They have a much fuller offering in terms of technology and outsourcing services as compare to our competition. We at ISGN want to address any pain points that our clients have. For example, the client may want to automate underwriting so we can start there and stretch out as they need us to fill future gasps. Some companies are offering technology or outsourcing, but we do both. I’ve been tasked to look at their technology here at ISGN and plan for the future in terms of automating the mortgage process. I will be incorporating technology strategy into their outsource offerings.”

****Anderson has been involved in all facets of the mortgage industry during his career, most recently on the technology side where he helped to develop one of the first e-mortgage platforms, and e-signature and e-vaulting technologies. At ISGN, Anderson will lead efforts to define the company’s technology strategy, enabling ISGN to create next generation products and services that take advantage of evolving web-based cloud technology.

****So, given his long tenure in our space, I asked my friend Tim what his true vision for the future of the mortgage space really was. He said, “The market has changed. The big guys have gone internal to defend themselves against lawsuits on the servicing side. So, I think there will be new entrants that come in with a new approach. These new players will not be mired down with legacy technologies. We’ll also see old players attack the market place with a new approach. ISGN is actively looking to partner with these players to streamline this market.

****“We want to eliminate manual touch points, increase loan quality and maintain compliance,” Anderson stressed. “You have to quit attaching the process piecemeal. We’ve got to move the orchestration of the mortgage process to the cloud. You need to call needed systems through the cloud to perform necessary functions and workflow. Dynatek had a comprehensive plug-in network that we will utilize, but our cloud approach will also interface to other systems through our cloud approach.”

****Anderson sees a more on-demand environment where the client calls the shots, not the LOS. “The client can determine the user interface that they want and we can orchestrate all that for them. It will be a shared and common system. It’ll all be about execution and how we deliver for our clients. The standard outsourcing service level agreements are based on metrics and performance. We will apply that same philosophy to technology. The only way to execute and scale is to automate. In a people-based process you’re only as good as the last person in that role, but there is always turnover. The way to fix that is to automate. There will always be competition for the best producers so you will never have 100% of those good producers 100% of the time. If you can automate and replicate that process you will be much better off, especially when you get audited.”

****Prior to joining ISGN, Anderson served as senior vice president of Lender Processing Services (LPS), and before that as president of SigniaDocs, Inc., where he was involved in the development of e-commerce mortgage products and services. Previously he was vice president of eMortgage services with Stewart Transaction Solutions. As a leader in the evolution of technology in the mortgage arena, Anderson also founded eMortgage Alliance, which supports MISMO open standards for compliant paperless processes for mortgages.

****Now Anderson has to take things even further. He is tasked with reshaping the technology strategy of a large company and aligning that company to fit the present and future needs of lenders. “Nobody can build that silver bullet,” noted Anderson. “You can’t have that one system that does everything, but that’s where the cloud comes in. We can create a cloud-based system of record that standardizes the data, the systems and the process. ISGN is in a unique position to build that new process. The other benefit to working with and being involved with ISGN is that they are not saddled with the old legacy mindset.”

****But industry vets like Dave Demster, Bill Adamowski, Jack Luhtanen and others have led ISGN’s mortgage strategy in the past with limited success. So, I asked Tim why he will be different. “A lot of those guys came from acquisitions,” Anderson answered. “We acquired their companies and brought them in. The problem is that we bought their baby and they were attached to their baby. I don’t come to ISGN through an acquisition. I’m open to new ideas and so is ISGN as a company. I’m not trying to sell a product per se, I’m about creating a long-term relationship and giving the lender what they need now and stretching out from there to automate more and more for the client when they’re ready. I want to build deep relationships with our clients and do what they need. We are not just a technology company or just an outsourcing company, we’re both.

****“ISGN will be bringing in more senior people like me who can develop an implementation process to eliminate pain processes for our clients. I’m happy to be on board a company that has taken the right approach at the right time. We don’t want to be a me too. There are too many people trying to cut price just to stay in the game. We don’t want to be a me too like that, we want to re-shape the mortgage space.”

****Well, if anyone can do it, my friend Tim Anderson can. I’ll be sure to keep you informed about his progress and all the news at ISGN as it unfolds.